When the Goods and Services Tax — or GST — was rolled out in 2017, it was billed as one of India’s biggest tax reforms. It replaced a maze of indirect taxes like excise duty, VAT, and service tax, with the promise of creating a single, unified market. It was meant to create a simpler, fairer, and more transparent system.
GST is what’s known as a destination-based tax, levied on every stage of value addition — a system designed to be simpler, fairer, and more transparent.Nearly eight years later, the system has seen major reforms. In its 56th meeting, the GST Council revamp the tax structure into a primarily two-rate system of 5% and 18%, and a 40% “special rate” on sin goods such as tobacco and luxury items such as large cars, yachts, and helicopters.
The government is stated that this rationalise will help both businesses and also put more money in the hands of the public. Finance Minister Nirmala Sitharaman has said the changes will put nearly ₹2 lakh crore back into the hands of people. The government hopes that this extra money will boost domestic consumption. What this means for businesses, consumers, and the economy at large?
Guest: Dr Sacchidananda Mukherjee, National Institute of Public Finance and Policy
Host: Nivedita V
Edited by Sharmada Venkatasubramanian
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